The Help is Out There for Bad Credit
Getting stuck with bad credit is like getting stuck with the worst catch-22 of all time. To get your credit score back on its feet, you need positive reports to your credit bureau. But for that to happen, you have to be making the money to pay all of your bills on time, and have credit cards that you can meet the payments on every month. Not only would most folks not have ever ended up with bad credit to begin with if they made enough money, but once you are mired in bad credit, the only credit card offers you get are sub-prime and are saddled with unreasonable fees, high interest rates and low credit limits. It feels like you are fighting a losing battle and that the road is far too steep to navigate. But there is a bunch of common sense and easy to do steps that you can take to help your credit recover.
The first step is realizing that every time you pay a bill on time, a positive note will go to your credit bureau. Even things like utility payments and student loan payments can help boost your credit score. At the same time, missing these payments can make your credit score worse. It isn’t just credit card payments that affect your credit score, it is everything, including mortgage and car payments, too. By making sure none of your payments are late, you can kick start your credit score and help it move in the right direction.
Although this next step is easier said than done, an excellent way to improve your credit score over a short period of time is to pay down your balances on your credit accounts. Remember, a credit account is more than just a credit card. If you have a mortgage, that is considered a credit account. If you have financing for your car, truck or motorcycle, that is considered a credit account, too. By paying down the total amount you owe, you are using less of the total credit that is assigned to you, and that shows up favorably on your credit score.
One step that many people take because it seems so logical is transferring their high interest credit card balances to a lower interest rate card, and then canceling out their old card. While this may seem like a good idea, it will actually have a negative impact on your overall credit score. The reason why this looks bad to your credit bureau is that you are suddenly using a much higher percentage of your overall credit, especially if the credit line you cancel is for a large amount. The less of your overall credit you use, the better off your credit score will be, so clip up that high rate card but don’t close out the account. If it happens to be a sub-prime lender who charges an annual fee, call the company and ask them to cancel the fee or you will be forced to consider canceling the account. Most lenders will gladly waive the annual fee to keep you as a customer.
A final tip is to request a copy of your credit report from the two major bureaus that keep track of the scores. Mistakes are often made and you have the right to challenge any entry on your report.
Keeping your credit score above water is essential for anyone that dreams of owning their own home, or even if you just want to be in the best financial shape possible. Everyone makes mistakes but it is fixing those mistakes that separates the responsible people from those that are going to struggle